Philosophy and science do not mix

Several months ago I filled out a form for my philosophy department asking the usual questions: what are you doing, what do you think your philosophy education did for you, ect. I said that I entered college thinking that philosophy was the foundation of knowledge, and now I feel like I know enough to focus on other disciplines. I'll be trying to avoid philosophy in the future. I didn't say that I feel like philosophy has become in large part mental masturbation, although it was probably implied. Yet here I am, writing about philosophy.

I finished A People's History of Science by Clifford D. Connor a few days ago. I was pleasantly surprised by the book: it captures and appears to validate my cynical, somewhat contemptuous attitude towards extremely abstract philosophy and economics perfectly. There are several theses, drawn from various historians/philosophers of science who seem to have done the major legwork. The most blatant thesis, drawn from Edgar Zilsel is that mechanics, craftsmen, laborers, sailors, and other common people advanced science. In support of this, Connor notes numerous figures and evidence that scientists did not attribute their findings to unsung assistants. I found two other theses particularly intriguing: that the oft-cited "Greek miracle" was anything but, and that the traditional scientific elite sometimes acted contrary to good science and ethics.

Most of us are vaguely aware of the latter, but may be surprised by the former. I know I was surprised: when I entered college as a freshman, I cited Greece as the foundation of Western civilization. My professor suggested Egypt, Babylon, and Phoenicia, but I was skeptical and never got the chance to investigate further. Connor shows that there is a reason for that. My comments below largely relate Connor's story (which are relating other academic stories); I don't have enough background knowledge to affirm or contest his facts.

Another intriguing thought covered briefly is the possible Oriental origin of Western Civilization's science, argued by Joseph Needham. I won't discuss this in more detail; although I find in intriguing, it's likely more controversial than Needham makes it appear. According to Needham, the list of Chinese technologies imported into Europe include printing, gunpowder, magnetic compasses, clockwork, casting of iron, stirrups, Pascal's triangle, rudder, segmental-arch bridges, and much more (p. 165).

The Greek Miracle

The Greeks themselves cited Egypt as the root of their wisdom. Aristotle, Plato, and Herodotus all said mathematics was brought from Egypt (Connor p. 123). Some said Pythagoras brought it, although Connor says that is unlikely; Thales was also reputed to have spent time in Egypt. Connor (p. 126, citing Martin Bernal) says that these statements by the Greeks were downplayed by "Classical Philologists" at the University of Gottingen in the late 1700s. Connor says that the scholars of antiquity apparently tried to explain away the Egyptian and Phoenician influence, including the adoption of the Phoenician alphabet, because Egyptians were a black mongrel race. Connor, citing Martin Bernal, is not exactly clear on how the influence is explained away. Among the scientists who extended this tradition was Georges Cuvier, the secretary of the Parisian Academy of Sciences. The Royal Society and the Academy were the two most prestigious scientific institutions of the day.

Connor argues that the Ionian materialists (Thales, Anaximenes, Anaximander) had a pro-science philosophy which was supplanted by the highly abstract, teleological philosophy of Socrates, Plato, and Aristotle. Benjamin Farrington has apparently developed the argument in Science in Antiquity that Plato's influence "was one of the main reasons for the death of science in the Greek world" (p. 146), as thought became increasingly a priori. Connor mentions something which I don't think was ever mentioned in my ancient philosophy class: only Plato's Timmaeus was known to European scholars up to the 1100s. Hippocrates stands out as an exception to the antiempirical Greek tradition. Commenting on Connor's perspective, I do think that the Greeks contributed to science (which was passed on to the Arabs), but I agree with Connor that Socrates and Plato probably had negative to neutral impacts. Aristotle was more of a scientist, but unfortunately he did not seem to emphasize the scientific method, as Francis Bacon later pointed out (leading to the "Baconian method"), although Bacon's thoughts were preceded by The Canon of Medicine and I believe Bacon's philosophy was more reflective of the culture than instructive. Galileo was studying physics in the early 1600s, while Bacon first published the Novum Organon in 1620.

Dirty Secrets of Scientific Elite

Like Howard Zinn, Connor digs up information deeply buried. The last half of the book focuses on how the scientific elite's emphasis on "value-free science" actually supported conservative politics and dubiously moral agendas (eg social darwinism, eugenics). Robert Boyle, the chemist known for Boyle's Law, could afford to hire numerous assistants ("Making Experiments by Others Hands", p. 330 - Tycho Brahe is another great patron, p. 324) and pursue scientific investigations. That and his undeniable scientific brilliance made him a major figure in the Royal Society. He along with others in the Royal Society believed in witchcraft and demonology (see, for example, his book The Devil of Mascon) and presumably did not oppose the ridiculous trials and punishments which went along with it. Connor notes that the burning of witches reached an all-time high in the 1630s (p. 365), coinciding with the rise of the Royal Society. Similarly, the famous proscientist philosopher Francis Bacon brutally tortured at least a few people (p. 363).

Connor frames the scientific landscape of the 1600s as a battle between the entrenched gentry elite (represented by figures such Boyle and Bacon above) and the craftsmen and artisans who do a lot of legwork. Connor chooses Bacon as a representative of the former group and Paracelsus as a representative of the latter (p. 305). Interestingly, neither figures were true scientists. Bacon isn't known for any science; Paracelsus had odd hermetical views on medicine and his theory on the "dose makes the toxin" is just common sense (and misleading common sense at that; some substances have negative effects at practically any dose while most substances are beneficial or neutral up to a hazardous exposure). Nevertheless, Paracelsus campaigned against a rotten Galenic medicine, preached the virtue of working with raw materials and alchemic exploration, which Connor says inspired revolutionary scientific figures such as Paracelsus admirer Johann Rudolph Glauber (p. 371), a notable chemist. The battle can be seen, for example, in the Parisian Royal Academy's rejection of Joseph von Fraunhofer, the inventor of the spectrometer, as a full member (p. 375). The last quarter of the book notes that programmers and "garage entrepeneurs" were the new craftsmen.

Concluding thoughts

The book brings together several amazing scholars in the history and philosophy of science. Reading their Wikipedia articles, it is clear that these people's works were often more controversial than Connor makes them appear. Avoiding the appearance of dishonest bias is one of the most important techniques for a good nonfiction writer. By relying on concrete and well-cited facts for his case, Connor actually manages to avoid seemingly dishonestly biased, even if his bias is clear. Connor doesn't say that the great scientists were not great scientists, but he isn't afraid to point out their flaws whereas most history draws a whitewash.

One New York Times review says that the book misses something when it doesn't describe the personalities of its individuals. I didn't get that impression; I get enough description of individuals, and he certainly doesn't avoid going deep into individuals. Disorganization is the biggest problem; the same people will be covered in different places on only slightly different topics. The NYT review also criticizes the extreme use of quotes. Again, this doesn't bother me - I like to know exactly what the cited source is saying, and if someone with more expertise has said something eloquently before, why not repeat it?

I definitely disagree with Connor on strange pseudosupernatural scientific theories. For example, he doesn't criticize the problems with Paracelsus' medical philosophy, and later he appears to defend Franz Mesmer's animal magnetism movement as a "people's science movement" when it was actually superstitious and possibly fraudulent. It sounds like a precursor to the modern "therapeutic touch":

Mesmerist therapy consistened in channeling the magnetic fluid through the patient ... often though not always the magnetic power was directed into a patient by a laying of hands ... the patient would report ... intense heat ... patients tremebled violently, went into trances... (pp. 404-5

You get the picture. Don't get sucked into thinking that anything is valid science.

As far as another theme, the values embedded in science - raw scientific data is value-free. The processing, interpretation, and application are not value-free. The decision as to what science to pursue is not value-free. Scientists cannot hide behind science for their values (or lack thereof). While it should go without saying, I think it's worth it to say that scientists, even brilliant ones, are not always good people. In many cases they are reactionary and immature.

Contrarian Investment Strategies: The Next Generation

I liked the last contrarian investor book so much that I'm now reading the next one. It's a fair bit of review so far, but it never hurts to read about the experts making major screwups another time. You can see what I'm talking about on page 68 of the preview. Currently I'm on page 81 where he's discussing the ubiquitous overconfidence cognitive bias. Highly recommended.

UPDATE: I actually finished this book later that night. As the first comment stated, his critique of the efficient markets hypothesis (spread throughout the book) was magnificent. I'm working on taking some notes for later, since unfortunately I only had it on a 2-week interlibrary loan.

The Things They Carried

I finally finished this book by Tim O'Brien on the Vietnam war. The most poignant chapters were Speaking of Courage and the Lives of the Dead. Tragedies of suicide and childhood romance, respectively. I've always been a sucker for childhood romance. Hearts in Atlantis, by Stephen King, was one of my favorite books partly because the first third was about childhood.

The Contrarian Investor

I wish I had written this book. Although it was published in 1979, the topics it covers are still the bleeding edge of investment science today -- behavioral science and the herd effect, value investing, low price-to-earnings, and cash flow.

The only area in which I differ with David Dreman is in technical analysis. He cites a fair amount of academic evidence against technical analysis. I haven't looked at that research, but studies of technical analysis are easily cherrypicked and misinterpreted. The fact that 90%+ of professional Forex traders use technical analysis is evidence enough of its usefulness. However, Dreman points out the ridiculousness of the other extreme, the efficient markets hypothesis, and the truth is that much of technical analysis is of dubious use.

Since much of this stuff is review for me, I skimmed it. He cites plenty of interesting information, including some psychology literature that I'd never heard of such as Gustave LeBon's The Crowd and Irving Jarvis's Victims of Groupthink, and a bunch of studies showing that experiments frequently make mistakes. Other literature was familiar, such as Muzafer Sherif's light experiment (when "confederates" in a study estimate the distance of light from them, the subjects yield to the judgment of the crowd) and Tversky and Kahneman's look at cognitive biases and judgmental heuristics.

Since the book was written in the 70s, the last chapter of the book is devoted to inflation. Conventional wisdom of the time was that inflation made stocks a poor investment. Dreman particularly focuses upon the Modigliani and Cohn position that professional investors just don't understand how inflation impacts equities.

First, investors confuse nominal and real interest rates (real interest = nominal - inflation). Since bonds pay high nominal rates in inflationary times, such as 9 percent in 1979 when inflation was 7 percent, investors look for rates of return from stocks in excess of 9 percent (the excess to adjust for rate) instead of in excess of the real rate of 2 percent. (UPDATE 2009-10-7: This paragraph doesn't make any sense to me right now. Why would investors looking for higher rates of return from stocks lead to them outperforming bonds? Outperformance occurs when an investment is not valued highly enough...)

Second, investors don't account fully for the effects of inflation. Inflation may create inflated profits (under the last-in first-out accounting method) and depreciation is exacerbated, but corporations benefit from being able to pay back their debt on much cheaper terms -- since the debt is relatively fixed and their income is being inflated.

Put together, these two factors make equity investments much better than bonds -- generating something like twice the return over a 10-year period.

Worldwatch Institute's State of the World 2007

I'm browsing through this book, and it is generally pretty good. It seems to focus on cities, however, and it is not as heavy on the facts and graphics as I sort of expected it to be.

I read the first half more closely, and now I'm more browsing. I was interested to read about eucalyptus as a cash-crop in Timbuktu, which lead me to the Wikipedia page. Apparently the tree is mainly native to Australia, and there's some major concern that it is an invasive species in South Africa.[1] Yet Worldwatch made no mention of that! The plant they mentioned next as helping to revitalize rural Africa, bourgou, seems more solidly ecological, and the National Research Council mentioned it favorably in a book on "Lost Crops of Africa". Apparently it can survive for months under water,[2] making it somewhat unique, and thus can be planted and harvested in areas where nothing could be grown previously.

Review of Kicking Away the Ladder by Ha-Joon Chang

I was pleasantly surprised by this book, which was first assigned to me in a class. I must not have read it then, and now I'm finally working through the books I've piled up over the years. It destroyed the misconceptions which I'd finally come to accept after years of brainwashing (with no evidence).

The first claim is that mainstream economists have ignored history. The "eminent" Nobel (the fake economics one) laureate economic historian, Douglass North, wrote "the standard history of the United States" economy which mentioned tariffs once "in order to dismiss them as an insignificant factor in explaining US industrial development" (2002:24-25). This can only be regarded as intellectually dishonest. Alexander Hamilton first proposed the infant industry argument for US industry, in opposition to Adam Smith's advice that the US focus on agriculture. The US maintained average weighted tariffs of around 40-50% on manufactured goods until 1950. The illustrative table, from Paul Bairoch's book Economics and World History, is available online.[1]

The second chapter focuses on policies which countries used to get an edge in industry. Espionage, tariffs, subsidies for imported raw materials, government-subsidized plants and researchers, and other methods were used to bolster industry.

The next chapter focuses on institutions. It's much looser and weaker, but makes the tentative case that we might be pushing important institutions such as democracy, central banking, various regulations, limited liability corporations, bankruptcy law, property (including intellectual) rights, the judiciary, child labor, social welfare provisions, and information disclosure too fast on developing nations. I'm not sure I'm convinced, but it is interesting. Some of these are important, others are less so, certainly. The most important, in my mind, are stable law, transparency, information disclosure, and property rights for the masses rather than the few. The succinct and scholarly discussion of economic institutions in historical and developmental context alone makes the book worth it.

After reading the book, I'm inclined to agree that activist policies are often necessary. Friedrich List, the major theorist of the infant industry argument, argued that free trade was really only beneficial among equally industrialized countries, and I'm inclined to agree. A country needs to build up its basic industrial institutions. However, tariffs are probably not the way to go today. Export-oriented policies used by the Asian Tigers are preferable. The issue is complex, however, as all the countries are chasing after a limited supply. Economists seem skeptical of the race to the bottom in international trade (in things like environmental standards), but I don't really understand why.

Capitalism and Freedom Review

After reading Capitalism and Freedom carefully, my opinion of Milton Friedman has been revised upward. I was assigned this book for class, but I never gave it a thoughtful, careful read till now. The book that I had read carefully from Milton, Free To Choose, left me thinking he was not a great thinker. My recollections were that Free To Choose was surprisingly lacking in nuance. That is probably because it was targeted for a mass audience, but its simplicity still seems like a negative mark for Milton Friedman.

Capitalism and Freedom has very few numbers, and no models, but it is well-argued nonetheless. It is full of rhetoric, but it is the kind of rhetoric that makes sense -- the kind which characterizes government controlling the individual as a violation of human rights. Friedman argues against the central control which was prominent at the time, but is no longer taken seriously. He does not so much engage the other type of socialism -- welfare capitalism, except to perhaps endorse it in his last sections on the distribution of income and social welfare measures.

In Friedman's second chapter, he notes the appropriate functions of government (p. 34) -- functions which I completely agree with, but which neocons, and liberals, tend to forget about. These include setting and enforcing the rules of the "economic game", promoting competition, countering monopolies, overcoming neighborhood effects (also called externalities), and even supplementing charity and the family in protecting the irresponsible. He identifies a number of policies as unequivocally wrong. Generally I don't agree that these are always wrong, but it is hard to see why agriculture price supports would be necessary. Others, such as tariffs, parks, and detailed regulation of banking would seem to have a place dependent upon the situation.

Chapter 3, on money, is probably one of the most important chapters. Friedman opposes the current Federal Reserve system, believing it is too liable to human error, and instead proposes (citing his A Program for Monetary Stability) a consistent rate of growth in the money supply of 3 to 5 percent.

Chapter 4, International Financial and Trade Arrangements, is also enormously important, and unfortunately awfully complex -- more so than money. Friedman endorses the floating exchange rate which Soros finds so troubling -- and the floating rate might be the best of bad options. Unfortunately, it leads to a fair amount of uncertainty, speculation, and sudden catastrophes as currencies change. If only there was a perfect system.

In chapter 5, Friedman critiques the Keynesian use of fiscal policy to alleviate unemployment. He argues that it relies upon untenable assumptions, because the money which the government spends must be borrowed from the public, which will drive up interest rates, and thus reduce the amount of spending and investment. He admits that it is ultimately an empirical question, but says that his recent work (The Relative Stability of the Investment Multiplier and Monetary Velocity in the United States, 1896-1958) suggests that there is no rise in expenditures, as his "quantity theory" suggests.

In Chapter 6, Friedman lays out the case for vouchers in education. I won't spend much time here -- I agree that vouchers are a good thing if strict standards are maintained, but Friedman endorses questionable standards, such as allowing segregated schools. Chapter 7 is on discrimination, a complicated political subject I'd rather not get into.

Chapter 8 is on monopoly. Friedman admits that all the ways of dealing with monopoly are bad, but tentatively concludes that leaving monopolies private may be best, mainly because innovation happens so quickly, and the government is so reluctant to let loose of its hold. I'm not sure I agree, but it is a decent point. He also makes the case here that a corporation should not be socially responsible, and that government needs to be the one holding people responsible. This sort of reminds me of how I used to play MUDs -- exploit the code, and argue that I shouldn't have to maintain reasonable behavior if it is not programmed into the game. It was probably a bad attitude, and a corporation should similarly not follow the letter of the law -- if it does, it will hopefully find itself in trouble, as I did. This argument from Friedman might be taken as an implicit argument that the government must be especially vigilant and free to take action.

He notes an interesting unintended consequence of our current system. Dividends are taxed double, which leads corporations to hold dividends and then invest them in their business, whether it is prudent or not. I fully agree with him here, and wish corporations disbursed more dividends. He wants to abolish the corporate income tax and instead force shareholders to record their profits from the company on their taxes -- meaning that they'd have to pay taxes on them, I'm guessing?

In Chapter 9, Friedman makes the case that the American Medical Association is a lobbying group bent on keeping competitors out. It's amusing. He defends "faith healers" by noting that one of thousands of quacks may produce a valuable breakthrough through their unorthodox experimentation. Those of you who know my Wikipedia efforts will know that I am sympathetic to alternative medicine, and I like this defense -- although I truly dislike things like therapeutic touch and homeopathy. Friedman argues that restricting medicine only to the highly-skilled reduces the total "physician-hours", and reduces total amount of care, thereby reducing the quality. Friedman tentatively notes that government certification may be necessary because certification information is nonexcludable -- one person can pass it on to others.

In Chapter 10, on the distribution of income, Friedman gets again into the tough ethical issues. He admits that the issue is difficult. Somehow he tries to run inequality from personal endowments together with inequality from inherited wealth, because the latter leads to personal endowments. To an extent, this is true, but he emphasizes it too much. He also makes a somewhat bizarre argument that if there were 4 Robinson Crusoes marooned on four islands, and one landed on a fruitful island, that Crusoe would not be required to share his wealth, and the 3 others, who were barely scratching by, would not be morally justified in taking it. He says this is analagous to someone finding $20 on the street, and then 3 people deciding to mug you for not sharing it. Does his analogy make sense? I dunno. I don't get ethical issues, generally, but I think 1) we should encourage a meritocracy, 2) we cannot allow people to starve or live with debilitating illness. Which brings up to the next chapter.

In Chapter 11, Friedman discusses Social Security and other social welfare provisions. He criticizes the idea behind social security -- that people cannot save for themselves -- however, I tend to think that people cannot. He notes this possibility as well, but thinks there are better ways of ensuring that people secure their retirements, so that the government is not left supporting them in their old age. He argues that most people would save for their unemployment, and that social security arose only because many people were unprepared for the Great Depression.

In Chapter 12, Friedman endorses a negative income tax, noting that such a system would target poverty much more specifically than minimum wage laws.

In 13, he sums up his arguments. Nothing too interesting here, and I'm losing steam.

Six Existential Thinkers

I just finished reading one of the most arcane books ever - Six Existential Thinkers by H.J. Blackham. Wikipedia says it "became a popular university textbook" -- and I must say I pity those students who had to read it. Only 160 pages but it felt like it took me a lifetime because, for the life of me, I could not understand a thing that was being said in many places. It felt to me that he was constantly trying to be intelligent by repeating the same thing over and over. For example, the Preface:

The purpose of this book is exposition, not criticism nor advocacy.

I hadn't even meant to use this part of the Preface, but look at the first sentence of the entire book!

Next:

There have been enough popular accounts of the general ideas of existentialists. It is time to discriminate between these thinkers; they are not exponents of of a school, and yet not the least impressive thing ... is the interrelatedness of their thinking: they lead into each other; they form a natural family; each throws light on the others, and together they develop the content of certain common themes.

And:

Finally, the general reader who is interested enough to want to acquaint himself with existentialism should be told at the outset that there is nothing in this book which he cannot understand if he really wants to. There are difficulties, but they are not technical, and they are likely to oppress the philosopher even more than the general reader.

Does that make me a philosopher? I don't think so.

The second word of the book is "pertinaciously". I had to look it up.

To be fair, the Kierkegaard, Nietzsche, and to some extent Jaspers sections are readable. The middle section, Marcel, is OK, but the last two sections on Heidegger and Sartre are likely the most opaque things I have ever read...

In Defense Of Globalization

In Defense of Globalization was written by Jagdesh Bhagwati, an acclaimed international trade economist and *cue spooky music* Council On Foreign Relations Fellow. The inside cover even claims that this is a "Council On Foreign Relations" book. It's no surprise that I picked it up, then.

What struck me the most early on in the book was the language barrier: Bhagwati's first language is clearly not English. It is hard to hold that against him, but the crudeness of some of his writing is painfully obvious. The book rambles absentmindedly, touching upon economic issues in one paragraph, moral issues in the next, and rants the next. The disorganized, muddled structure of the writing cannot be blamed on the language barrier. Strangely enough, this strange, circumlocutious writing style is common among economists, who seem uncomfortable when not doing equations.

Chapter 1 - Anti-Globalization: Why?

Bhagwati makes the fair case that most of the anti-globalization movement has not done the research on globalization and does not understand economics. They are often young people who "see capitalism asa system that cannot meaningfully address questions of social justice." He laments that the view of capitalism as a "system that can paradoxically destroy privilege and open up economic opportunity to the many " is still uncommon, and points out that "by replacing markets systemwide with bureaucratically determined rations ... worsened rather than improved unequal access."

Already I am suspicious and irritated - there is no mention of the financial power which can accompany capitalism and has meddled in American government for so many years. Sure, it's easy to make "capitalism" sound good when you compare to "socialism" a la a centrally planned economy. But where is the mention of welfare capitalism? What about the more legitimate argument that the globalization has thus far allowed corporations to consolidate too much centralized power and market share themselves? Nowhere in the entire book do I recall Bhagwati making an informed criticism of multinational corporations and unchecked capitalism despite its many abuses.

Another interesting drive which pushes young people to protest globalization is "the dissonance that now exists between empathy for others elsewhere for their misery and the inadequate intellectual grasp of what can be done to ameloriate that distress." He does not add that few of these empathic young people are willing to sacrifice their dollars to help - that may be an unfair criticism, considering how little dollars most of them have. He references the empirical ethics of Hume and Smith, noting that while humans feel under "Hume's concentric circles of reducing loyalty and empathy ... the Internet and CNN have [taken] Hume's outermost circle and turn it into the innermost." When we see and hear the cries of the poor and weak, they become more real to us. On the other hand TV and the Internet have "[shifted] us steadily out of civic participation, so that the innermost circle has become an outermost one."


This book is rich and full of ideas, even if they are spread fairly haphazardly throughout the book. It would be impossible for me go through all of them.


For all this, the book received high praise; for example:

"This book will make history. It will also be a blockbuster, not only because of the depth of Bhagwati's powerful argument backed by extensive research, but also because it is immensely readable and surely the most humorous piece of economics ever written."
-- Hernando De Soto

Humorous? While I respect De Soto, I wonder whether we both read the same book. Econ humor? Here's a joke:

I recall particularly the Cambridge Union Debate, where, astonished that free trade being blamed for environmental problems and other ills in the world, I replied to Teddy Goldsmith by recalling Balzac's 1831 novella ... "Mr. Goldsmith", I added, "you seem to have with you a similar monocle, except that when you use it and see us wonderful free-traders, you find us turned into ugly monsters, our halos turning into devil's horns!"

Hahaha - I see! Free-traders are angels and all of us who see a potential danger of to the environment from free-trade are somehow deceived? Then show us how we are wrong. Bhagwati's environmental chapter seems focused mainly not on environmental harms but rather on the ethical question of how we should value the environment.

Chapter 11 - Environment In Peril?

Of course, increased GDP per capita strongly correlates with reduced outputs of certain pollutants (everything but CO2 and garbage), and that free trade increases GDP growth. But what about corporations outsourcing work to places with lower standards? What about those nations (of which there are plenty) which will increase their pollution with increased production? How bad is the problem, and what can we do to alleviate it? Bhagwati answers none of the questions. Instead, here are his words: "Even God does not know what sustainable development means". He compares it to socialism - as if it was so hard to understand the eminently reasonable and doable concept of Cradle To The Grave.

Chapter 12 - Corporations: Predatory or Beneficial?

Bhagwati spends a fair amount of time claiming that "anti-corporation arguments are not supported by the facts" but not all that much time showing it. He introduces the topic by referring to an old Woody Allen joke:

There's an old joke... two elderly women are at a Catskill mountain resort, and one of 'em says, "Boy, the food at this place is really terrible." The other one says, "Yeah, I know; and such small portions." Well, that's essentially how I feel about life — full of loneliness, and misery, and suffering, and unhappiness — and it's all over much too quickly.

But does he have a point? Yes, corporations cause problems, but let's be realistic: they are the only force in the world capable of increasing GDP growth. Let's not pretend foreign aid to corrupt governments is useful. Corporations are often a necessary evil. They will always try to extract as many profits as possible, imposing external harms in the form of pollution while they do; they will use the means of lowest cost possible in many cases at the cost of their workers. Sometimes they will use the government to help them form a monopoly, as Telmex in Mexico has done. The main question, then, is to what degree can we get away with regulating corporations to keep them in line, and to what degree this will be efficient -- to what degree it will be on net beneficial to society and the environment. But Bhagwati does little real in-depth analysis of corporations. His one big point (and it is a big one, I suppose) is that corporations pay a "wage premium": they pay an average wage that exceeds the going rate, mostly up to 10 percent and exceeding it in some cases ... from 40 to 100 percent." This is fairly powerful.

We don't have the power to tighten the noose on corporations globally - increased regulations in a developing country could discourage corporations from coming to that country. Bhagwati claims that the effect is not significant empirically, but provides no numbers. Instead he references an economist who simply says that "regulations do not matter to site choice." (Should be "for site choice" - the constant little grammatical mistakes of these economists is annoying.) He points out that multiplant firms "invest in different locations, as multinationals often do, they tend to work uniformly witht he most stringent standards they face among these locations ... simply put, it is more cost-effective to run all of their plants with the same basic technology, so we get a race to the top."

Chapter 13 - The Perils of Gung-ho International Capitalism

This is the one area where Bhagwati criticizes the status-quo and ironically enough decries the "Wall Street-Treasury Complex." He says the East Asian Financial Crisis was caused by a lack of controls on the flow of capital. I'm not very well-educated on this stuff and I'm getting very tired of typing so I think I'm about done.

Conclusion

Unfortunately I've tired myself out and can't write a decent conclusion. When I began writing I wanted to end on a very critical note. In large part I was frustrated by Bhagwati's terrible grammatical style, rambling paragraphs, and lack of hard data. He doesn't get in deep and analyze actual policy, nor does he recommend any improvements. He points out flaws in our current system only in very general terms, or with convoluted logic and unexplained acronyms. This book was billed as a masterpiece but it is thoroughly second-rate. If this is the best defense that a star economist can do then perhaps we shouldn't be trusting them on their data. The interesting thing about economic science is that it sometimes seems as if the only people who really understand and follow it are the economists. Sometimes one has to wonder whether the Emperor Really Does Wear No Clothes. Shamefully written; I would give it two out of five stars or so. The ideas and the arguments are OK - good, even, but the presentation and the flippant, casual manner in which the arguments are made pulls the quality down. Concerns and examples which many of us know happened are not mentioned, which leaves me suspicious as to what else is being left out. There is a good review on Amazon expressing the same sentiments.

Broken Contract: A Memoir of Harvard Law School

I'm in the middle of this book right now, and it's really pretty good. The guy is more leftist than I have ever been (or ever will be), but at the same time he has some common sense stemming from consistent principles and an ability to understand economics; he recognizes the contradictions and ugliness of standard leftism. He is very similar to Sidney Rittenberg who's book The Man Who Stayed Behind I just finished. Sidney's story is a classic example of propoganda and idealism fooling an intelligent person (with a Bachelor's in Philosophy) to the point that he supports a despotic totalitarian Chinese government. He joins their inner Communist circle, then is imprisoned for six years. When he leaves prison he becomes a propogandist; a man who spends his every day deliberately twisting real information into complete falsehoods. Then, after speaking out in favor of democracy, he is imprisoned for another ten years. Even then he doesn't repudiate Communism until he's finally seen how much damage it caused to the Chinese economy.

Kahlenberg, the author the Broken Contract, comments on the Law & Economics group at Harvard Law School:

steve Shavell, a bespectacled economist, gave an abstract, conservative, and, at times, nasty lecture. In the specific case we were studying, Shavell argued that a judge should not order a landlord to improve living conditions, because it would be more "efficient" for government to aid in the redistribution of wealth and let the tenants decide for themselves whether they wanted to use the money to move to better housing or for something else. The argument, of course, completely ignored the political reality that a direct cash payment to the poor lacks a powerful constituency; programs need corporate beneficiaries, farmers in the case of food stamps, developers in the case of housing.

I don't know whether direct cash in this case is appropriate. It doesn't seem easily workable (cash transfers to all renters?), but he raises a decent objection. The problem is not necessarily that it lacks a constituency (renters are a fairly powerful constituency, as rent controls attest); it's more that a direct cash payment to renters (not "the poor" -- renters in general are what we are talking about, and some of them are definitely middle-class) seems like welfare while a requirement that landlords keep up their apartments seems like fairness. HSAs have the same problem - monthly HSA deposits to the poor seems like welfare, where universal healthcare at least seems "fair" in that everyone stands in line. Yet does that justify the latter policy over the former? Not at all, especially when the latter likely would cause more harm than good.

He first mentions his disagreement with the left on the area of civil rights; he believes in harsh punishments because crime disproportionately hurts the poor. So far he's mentioned two areas of left ridiculous. The first has to do with his female "Critial Legal Studies" professor who doesn't get tenure, Clare Dalton:

In the late spring, my displeasure with the left at Harvard increased as I watched it react to Clare Dalton's tenure battle. Dalton my second-semester Contracts professor, a crit, and the worst teacher I ever had. In class, she would move from case to case, failing to tie them together or distill any broader meaning from them. She tried to employ deconstructionist analysis and critical legal theory, but her methods were never convincing. The level of noise in our classroom was embarrassing evidence of how little respect she commanded ... Even she could not have known how her case ... would become the cause celebre among the liberal community in Cambridge. Favorable pieces appeared in the media, petitions circulated, and rallies were held. At graduation, students wore yellow armbands, and one group of graduates raised letters spelling TENURE DALTON ...

To make the story short, she didn't get tenure - but she did assign the following exam:

Dalton's eight-hour take-home Contracts exam was an outrage. It contained two questions, one of which involved a hypothetical professor, Joe Levin, who was sueing the "Nameless School of Law" for denial of tenure. His case was based on "ideological discrimination" and "denial of academic freedom" ... the case was clearly not his but hers, which was disturbing and detracting for a few reasons. First, you felt that if your exam made powerful arguments on the university's behalf ... Dalton ... would have trouble grading objectively ... second, there was a sense ... that you were being used to as a source of theories and ideas upon which Dalton could base her own case ... she should have been sensitive to the perception that she was exploiting us just as surely as the worst capitalist exploits his workers. Illegitimate hierarchy, indeed.

Looks like Harvard Law School (or Northeastern Law, where she now teaches) aren't always what they're cracked up to be - that test question is indeed astonishing. To me, adopting the legal positivism that I usually dislike, the case is clear: universities go through their process and grant tenture based on what their board decides. There's no reason to judge differently.

The second example is more interesting and far-reaching; in fact, it stretches back to Sidney Rittenberg and his work in propaganda. Words and information are strange things; they have the power to subvert, destroy order, spread untruth or, most significantly, cause moral dissolution. In some cases the line can be drawn between clear truth and untruth, but on philosophical or moral/ethical topics that line is not so clear (Social Darwinism is an easy example of a perspective that one could easily justify suppressing even if its scientifically correct). Here is what happened:

I read a story in The New York Times headlined CONTRA LEADER"S HARVARD APPEARANCE DISRUPTED ... Adolf Calero ... had been prevented from delivering his speech at HLS when he was attacked by a Tufts University senior shouting, "Death to the contras" ... dozens of students in the audience clapped ... the left's negative response in this instance was as shortsighted and unprincipled as its positive response to Clare Dalton had been ... Didn't Kimball realize that his statements pushed liberals like me to the right? That he actually made a figure like Calero look victimized and sympathetic? Not only was the left's position tactically stupid, it was also intellectually arrogant. Who was Kimball to decide for the entire university that Calero was not fit to speak? Who gave him veto power?

This idea is surprisingly common among the left (as well as, of course, the fascist right). It is not common among classical liberals, but perilously few of us are politicians. In this case the left was motivated by anger, but in many cases the left is motivated by fear. Their fear is that the right will justify its position with something that makes sense, and weaken the left's position. This was the basis of the massive propaganda in Communist China. Literally all information in China was propaganda. Only insider news executives such as Sidney Rittenberg were allowed access to anything resembling real news, and even Rittenberg was never told about the tens of millions of peasants starving to death during The Great Leap Forward. Liberal elitists (which all leftists ultimately are) believe that the masses are not responsible enough to handle information on their own, or that offering good information to the masses is not beneficial to society.

This sort of belief manifests itself, for example, in Adam Rawling's argument that scientific research (both social and physical) should be restricted only to those who "are willing to push past barriers to access it", despite the obvious benefits of free information which is easily referenced, discussed, and examined. Imagine a Wikipedia which referenced a list of all scientific articles covering a particular issue, free for anyone to examine and critique individually.

The Council on Foreign Relations is a foreboding example of liberal elitism, with its penchant for surreptitiously advancing elitist "liberalism" and internationalism through unconstitutional and illegal means, if necessary (see FDR, his National Recovery Administration, and his attempt to pack the Supreme Court. The CFR's strongest supporters were Democrats such as FDR, Dean Acheson, George Marshall, and David Rockefeller. Some of these people found their way into Sidney Rittenberg's story: at one point a Communist says that Mao Zedong appreciates "deeply respects Dean Acheson and George Marshall." Later, after Senator McCarthy finally started to figure things out, economist Frank Coe (Soviet spy) is banished to Communist China to smoke cigars and live the easy life. Coincidentally, he was a high-ranking official in the Department of the Treasury, the, United Nations and the International Monetary Fund. Sol Adler was another Marxist spy and Department of the Treasury official who ended up in China working for Mao Zedong. Coincidentally, he worked for the CFR and Rockefeller funded Institute of Pacific Relations, the CFR's sister agency.

For those of you who feel the knee-jerk reaction to demonize McCarthy (spare me the standard rhetoric and offer me some history) - think about why. Do you really know what happened then? McCarthy was elected in 1946, but he didn't begin his attack on Communism until 1950. Meanwhile, the House Un-American Activities Committee was founded in 1947 and blacklisted Hollywood employees. McCarthy, in the Senate, was uninvolved with that effort. McCarthy's focus was on the State Department, and his attacks were largely ineffective. Read those Wikipedia articles on them for a decent little summary. It may also be of note that Communists in general supported an ideology which supported totalitarian control over information and people.

If I had the Shadows of Power book handy I could into the CFR at incriminating length, but I'm forced to transcribe the information, which is time-consuming. Nevertheless, trust me - it is damning. Some might say "well, if these guys were Communists, then why is Communism dead?" Well, who knows if they actually believed in Communism - if they believed in it as an idealistic tool towards peace and prosperity, then perhaps they came to their senses. If they believed in it as a tool towards power, then obviously they found that their strategy must change - and it obviously has changed. There are still people seeking to consolidate their already significant power in the world, but today one might find them in the Bilderberg Club. Not that the CFR isn't powerful - today, they happen to have Peter Peterson (don't recognize the name? Do you recognize the name Blackstone Group?) as their Chairmain, and one of the members, Fouad Ajami, just so happens to be one of the few Middle Eastern scholars who believes strongly in the Iraq War. I ought to check the early editions of Foreign Affairs.

Now I need to finish this book. Incidentally, it seems that Richard D. Kahlenberg (the author of Broken Contract has written several ostensibly favorable books on school vouchers, and another arguing against Affirmative Action in favor an economically-based affirmative action program.

Working Recently

As I forewarned in some earlier post, I don't post as much when I'm not getting high every other day. I'm more inhibited, neurotic, and frankly less insightful. When I read books and I'm not high I find myself skipping over lines, but when I'm high I tend to dwell on passages for way too long.

I sat around the house for a while upon coming back home after school, but now I'm back at work -- if you can call it that. I work for the government and get to sit around reading all day. So I visited the library. Here's what I checked out:

Basic Writings of Nietzsche translated and edited by Walter Kaufmann
The Shadows of Power: The Council on Foreign Relations and American Decline by James Perloff
Letters to a Young Mathematician by Ian Stewart
Remember Everything You Read by Stanley D. Frank
Master The GRE 2005

Other books that I own and have been reading are:

Explaining the Atom by Selig Hecht
The Most of S.J Perelman
Play Poker Like the Pros by Phil Hellmuth, Jr.

The nice thing about my job is that I basically sit around outside for long periods of time, and get paid over twice the minimum wage. Gives me plenty of time to read, even if it can get cold.

All of these books (with the exception of Remember Everything You Read and Master The GRE) are pretty interesting, but the most interesting has been The Shadows of Power. It is a well-researched and thoroughly incriminating look at the organization founded by J.P. Morgan which, up till 1988, produced "14 secretaries of state, 14 treasury secretaries, 11 defense secretaries, and scores of other federal department heads" since it was founded in 1921. According to Perloff, every Secretary of State since 1949 has been a member of the Council, although one joined the Council after being appointed.

The other very interesting book was Explaining the Atom. I never realized that chemicals were so interconnected, or that atomic chemicals had been so necessary for further research into the atomic particles. (I never took chemistry!) For example:

...consider spot 32 in the fourth horizontol coil of the Periodic Table. This element lies in the vertical column between silicon and tin, and is now called germanium. Medelejev in 1871 predicted its existence and called it eka-silicon. He said it would be grayish-white in color, and would give a white oxide when burned, and would not be affected by acids and alkalis. Moreover, he gave definite values for its atomic weight, its density, its atomic volume, and even its boiling point. Fifteen years later ... found Mendelejev's predictions almost perfectly fulfilled.

The book has inspired me to memorize the the periodic table and get the basic gist of every chemical on the list. (Up to number 26!) The last half of the book is all on the atom bomb, and I don't remember a whole lot of the details.

I hardly feel like I can do justice to an overview of these books, but I'll probably attempt to do an overview of the Shadows of Power. Really, I recommend that one out yourself, though.

Ten Economic Myths

Great article here on the history of economics from an Austrian Economic Historian.

Complement that with "Why I Am Not An Austrian Economist" for some substantial learning.

I am currently reading Bureaucracy by Ludwig von Mises.

Books to Goodwill

It's that time again. Time to toss books because my tiny room is a godawful mess.

Waiting for Godot by Samuel Beckett: "One of the true masterpieces of the century", according to Clive Barnes. I didn't get it.

The Old Man and the Sea by Ernest Hemingway: I have always considered Hemingway overrated.

Excellence: A collection of quotes.

The Millionaire Next Door: Interesting.

Free To Choose by Milton Friedman: Written for the masses with hardly any sources cited, but edifying nonetheless.

Our Town by Thornton Wilder: A great little screenplay who's author rightly won a Pulitzer Prize.

This is so difficult. I'm wringing my hands over The Last Lion (about Winston Churchill) and Staying Healthy With Nutrition. Meanwhile, I should be doing homework.

The Clouds by Aristophanes

The Clouds is so amusing:

STUDENT: All right. Chaerephon of Sphettus once asked Socrates whether, in his opinion, a gnat buzzed through its mouth or through its anal sphincter.

STREPSIADES: What did Socrates say about the gnat?

STUDENT: He said that the gnat’s intestinal tract
was narrow—therefore air passing through it,
because of the constriction, was pushed with force
towards the rear. So then that orifice,
being a hollow space beside a narrow tube,
transmits the noise caused by the force of air.

STREPSIADES: So a gnat’s arse hole is a giant trumpet!
O triply blessed man who could do this,
anatomize the anus of a gnat!
A man who knows a gnat’s guts inside out
would have no trouble winning law suits.

STUDENT: Just recently he lost a great idea—
a lizard stole it!

STREPSIADES: How’d that happen? Tell me.

STUDENT: He was studying movements of the moon—
its trajectory and revolutions.
One night, as he was gazing up, open mouthed,
staring skyward, a lizard on the roof
relieved itself on him.

STREPSIADES: A lizard crapped on Socrates! That’s good!

Whenever one thinks of ancient literature they think of boring, slow, or hard to understand stuff. This shit is too hilarious.

There is some irony in the later stuff as well.